Pot Stocks Jump on Call to Move Marijuana to Lower-Risk Category – Medical Marijuana Program Connection

(Bloomberg) — Marijuana stocks surged on Wednesday after the Drug Enforcement Agency said it would review its classification of cannabis following a letter from the US Department of Health and Human Services that urged it to loosen rules on the substance. 

The MJ PurePlay 100 Index, which tracks cannabis stocks, jumped 13%, the most since October, on the news. Goodness Growth Holdings and Columbia Care Inc. were among the biggest gainers in the index, up 26% and 39%, respectively. Tilray Brands Inc. ended the day 11% higher, while Canopy Growth Corp. rose 13%. Verano Holdings Corp. gained 17% and Cresco Labs Inc. advanced 22%.

Assistant Secretary for Health Rachel Levine recommended to the Drug Enforcement Agency that cannabis be classified as a Schedule III drug under the Controlled Substances Act, according to a letter viewed by Bloomberg News. A DEA spokesperson confirmed the department had received the letter and the agency will initiate its own review. 

A Schedule III designation would put cannabis in the same category as anabolic steroids, testosterone and ketamine. It’s currently a Schedule I drug alongside heroin and LSD.

“While this is not the full legalization and access to the banking system that investors have been hoping for, it’s a piece of good news for an investor base that’s been craving some,” said Steve Sosnick, chief strategist for Interactive Brokers. 

A Schedule III rating would remove some burden from US operators, Stifel analyst W. Andrew…